You do not think the 39' hydrostatic head will reduce the flow, perhaps enough to not trigger the paddle in the flow switch?
If the inspector's test outlet was 39' in the air an argument might be made that it *might* but the 1" valve is located 5' above the floor with the outlet 1" above the floor it the height of the system wouldn't matter.
Take a building 200' high with a 60 psi static and 59 residual pressure and it's obvious you wouldn't get a drop of water from an open sprinkler head as the column of water would only reach 138' high. But what if we were able to completely fill the system using a test pump expelling all trapped air in the process? If the system was totally filled in this manner you would get a normal flow from the inspector's test regardless of the height of the building because the system would be acting just like a siphon hose on a can of gasoline. If you installed pressure gages located 5' above the floor on the riser and just above the inspector's test valve they would both read around 58 psi but a gage 200' up on a branch line would read a negative or minus 29 psi but water would still flow due to the siphon effect.
Given these conditions if a sprinkler head were to discharge the vacuum would be broken and your sprinkler head would suck air until the water column reached 138' at what point it would stabilize all assuming the system didn't have a check valve at the riser.
I recognize this is a stupid analogy only to prove a point.
The best setup would be to have the inspector's test valve and discharge up at the highest sprinkler but that wouldn't work very well.
In a typical 40' building with a normal type water supply, 60 static, 50 residual @ 800 gpm for example, an inspector's test at the riser and one located at the far end of the system would each put out identical rates of flow less the small decrease in the far inspector's test compensating for a very small expected friction loss in the longer 1" drop. The only place you would have any friction loss, with only one head open, would be the 1" inspector's test line and at a typical flow of 20 to 40 gpm that wouldn't be a whole lot. Maybe 5 to 8 psi at most?
Typically these flow switches activate with around 8 gpm and if you've ever tried to refill a system by slightly *cracking* a control valve so as not to set off the flow switch you know this is near impossible.

Like a dumb ass I've tried but I was never was successful.
The only reason an inspector's test is there is to test the flow switch.
Given a typical water supply I don't see any advantage to having an inspector's test located at the far end of the system. With a typical water supply if the flow switch works it is going to work regardless of where the head is that goes off.
And on a wet system you really don't need a flow switch a pressure switch on an alarm check valve works just as well and with that to work all you need is a slight trickle of water flowing.